Analysis Of The Increase In Price Of Brazilian Fruits

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This article speaks of the increase in price of Brazilian fruits, such as bananas (52% more expensive) and the decrease in price of Brazilian vegetables, such as onions (55.5% cheaper). Due to the weather conditions in Brazil, farmers produce vegetables easily, while fruits production is hard. Subsequently, there is a big change in price of vegetables and fruits. The quantity supplied of vegetables and fruits was affected by a non-price determinant of supply named Shock (rainy season and meteorological conditions). Shocks are unexpected events that decrease or increase the supply of a determined good. The supply shock is positive for Brazilian vegetables because it increases the quantity supplied, shifts the supply rightwards The farmers of fruits who hardly produce fruits would be forced to sell small quantity of fruits by a smaller price. The other problem would be the non-price rationing, due to the lack of fruits the market would have unsatisfied consumers who are able and willing to purchase fruits but unable to. Therefore, the first consumers would buy the fruits or sellers would sell fruits to their favorite costumers. The other possible problem is underground market, resultant of individuals who legally buy fruits but the resell them for a higher price than the ceiled price to all those consumers who did not manage to buy fruits. Yet, many consumers would be very pleased with the decrease in price of fruits. Some workers of the market of fruits or related to this market would be fired due to the decrease in quantity supplied, causing a higher rate of unemployment. The government would gain popularity from the individuals who were better off with the price ceiling. (Tragakes, 89 and 90) The price floor works as price support for the vegetable farmers as their income too low, they will now get a higher price, produce more and increase their revenues. Workers also benefit from this situation as there is a need of more production, they are most likely to be employed. But there are negative effects, as for the consumers who lost pay a higher price for the good and a smaller quantity than before and the government that buys the surplus, which means a burden on the budget that could be used in areas in need. (Tragakes,

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